Pakistan Increases Vehicle Taxes (2025) Making Cars More Expensive

The government has implemented new taxes on vehicles as part of the new financial year, making it more expensive for consumers to purchase a car. These changes include:

  • Regulatory Duty: A new regulatory duty has been introduced on imported vehicles and spare parts.
  • Increased Taxes on Locally Made Vehicles: The government has also raised tax rates on vehicles manufactured in Pakistan.

New Fixed Tax System:

The previous fixed tax amounts on locally manufactured vehicles have been replaced with a new fixed tax system based on engine capacity:

  • Up to 850 cc: 5% tax (previously fixed amount of 10,000 PKR)
  • 851 to 1,000 cc: 1% tax (previously fixed amount of 20,000 PKR)
  • 1,001 to 1,300 cc: 1.5% tax (previously fixed amount of 25,000 PKR)
  • 1,301 to 1,600 cc: 2% tax (previously fixed amount of 50,000 PKR)
  • 1,601 to 1,800 cc: 3% tax (previously fixed amount of 150,000 PKR)
  • 1,801 to 2,000 cc: 5% tax (previously fixed amount of 200,000 PKR)

Significant Tax Increases on Larger Engines:

For larger engine vehicles, the tax increases are more substantial:

  • 2,001 to 2,500 cc: 7% tax (previously 1% tax)
  • 2,501 to 3,000 cc: 9% tax (previously 1% tax)
  • Above 3,000 cc: 12% tax (previously 2% tax)

These changes are expected to make it more expensive for consumers to purchase new vehicles, potentially impacting the auto industry in Pakistan.

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